CDBG Compliance Worksheet
TLDR
Community Development Block Grant funds carry compliance obligations that catch nonprofit subrecipients off guard — national objectives documentation, beneficiary tracking, environmental review, and Davis-Bacon when construction is involved. This worksheet walks through the obligations that apply to most nonprofit subrecipients, with checkpoints for documentation and reporting. Use it alongside your CDBG agreement, not instead of it.
Why CDBG Compliance Surprises Nonprofit Subrecipients
Many nonprofits accept Community Development Block Grant subrecipient awards thinking they are similar to other federal grants. They are not. CDBG carries a layered compliance regime: HUD’s CDBG-specific rules at 24 CFR Part 570, the Uniform Guidance at 2 CFR 200, the grantee’s local policies, and program-specific cross-cutting requirements (environmental review, Davis-Bacon, fair housing, Section 3, lead-based paint). The HUD Office of Community Planning and Development monitors these layers, and findings cascade through the grantee to the subrecipient.
This worksheet covers the obligations most nonprofit subrecipients face. It is not a substitute for your subrecipient agreement, your grantee’s policy manual, or HUD’s notices. Use it as a checkpoint structure to make sure nothing is missed. For the introductory overview, see the CDBG guide.
Section 1: National Objectives Documentation
Every CDBG-funded activity must meet a national objective under 24 CFR 570.208. The grantee assigns the objective in the agreement, but the subrecipient is responsible for documenting compliance.
Three national objectives
- Low- and moderate-income (LMI) benefit. Activities serving LMI persons by area, by limited clientele, by housing, or by job creation/retention.
- Prevention or elimination of slums and blight. Activities addressing specific slum or blight conditions in defined areas or on a spot basis.
- Urgent need. Activities responding to threats to public health or welfare; rare and tightly defined.
LMI documentation requirements
Most nonprofit subrecipients meet the LMI national objective. Documentation depends on the specific subcategory:
- LMI Area Benefit (LMA): The activity benefits all residents of a primarily residential area where 51 percent or more are LMI. Document with current HUD LMI data for the service area census tracts or a HUD-approved income survey.
- LMI Limited Clientele (LMC): The activity serves a clientele that is at least 51 percent LMI or that consists exclusively of presumed-eligible groups (abused children, elderly persons, severely disabled adults, homeless persons, illiterate adults, persons with AIDS, migrant farmworkers). Document with individual income certifications or status verification.
- LMI Housing (LMH): Activity provides or improves permanent residential structures occupied by LMI households. Document with household income verification.
- LMI Jobs (LMJ): Activity creates or retains jobs, at least 51 percent of which are held by or made available to LMI persons. Document with employee income verification or area benefit standard for job availability.
Documentation checkpoints
For every activity:
- Which national objective and subcategory?
- What documentation method?
- Who is responsible for collecting it?
- Where is it filed?
- How is it reviewed before reporting?
Insufficient national objective documentation is the most common CDBG finding. Build the documentation flow before the activity begins, not after.
CDBG Compliance Worksheet
A working compliance checklist for nonprofit subrecipients of Community Development Block Grant funds — national objectives, eligibility, and reporting. Delivered by email.
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